The end of the year is when many of us begin setting goals and establishing priorities for the next year. Whether you call them resolutions, goals or intentions, they are a great way to set yourself up for success. Having clear goals provides direction for your financial plan.
In 2024, the top three financial resolutions for Americans were to save more money (41 percent), pay down debt (38 percent) and spend less money (30 percent), according to Fidelity’s 2024 Financial Resolutions survey.
Here are 10 financial resolutions to set for 2025 to get yourself on track for financial success. Maybe you’ve already accomplished some of them; if so, choose one or more new resolutions that could benefit you and your family.
1. Build and follow a budget
Many people don’t really know where their money goes each month. It’s difficult to get ahead and save for the future while operating amid this kind of uncertainty.
A budget is the cornerstone of effective financial planning. Building and following a budget makes it much easier to know where your money is going. It also helps you keep your finances under control and reveals when you need to adjust your spending.
If you haven’t already built a budget, all you need to do is document your expenditures and income. First, go through your bank and credit card statements and document how much you spend each month in categories like mortgage or rent, utilities, car payments, groceries, fuel, dining out, gifts, entertainment, savings, and charity. Next, compare your monthly income against those expenses. See what you can cut back on so you are contributing sufficiently to your operating expenses and savings accounts.
Debt.com’s seventh annual budgeting survey, released in 2024, revealed that more people were budgeting and finding it beneficial to stay out of debt. In fact, 20 percent more respondents said they were using a budget than in the 2017 survey. Also, the percentage of people who said budgeting “helped them get out or stay out of debt” increased from 73 percent in 2018 to 89 percent in 2024.
2. Start or build up an emergency fund
Life is full of surprises, and having an emergency fund can provide a financial safety net. Aim to have at least three to six months’ worth of living expenses saved in an easily accessible account. This fund will help you weather unexpected expenses like medical emergencies, car repairs or a job loss.
Having an emergency fund can prevent you from having to charge those expenses to high-interest credit cards.
If you have had to tap into that fund to pay for such an expense, make sure you replenish the fund quickly. You want to be prepared for the next emergency.
If you have not established an emergency fund yet, make it a priority. Consider using a basic savings or money market account. Ideally, your emergency fund needs to be linked to your checking account so you can access that money within a day, but not in an instant. That fund needs to be liquid yet safe.
3. Pay off debt
It is expensive, and unwise, to carry debt. The average personal debt per individual American grew from $21,800 in 2023 to $22,713 in 2024, not counting mortgages, according to recent research. Carrying debt erodes your purchasing power and eats into your potential retirement savings.
The first step to take, before you even begin paying off your existing debt, is to stop using your credit cards for a while, and use only cash. Work with your financial advisor to explore options for paying off your debt, which include minimizing new charges, cutting your spending, taking advantage of balance transfers to lower your interest rates and possibly taking out a consolidation loan.
4. Increase your income
Resolve to make more money in 2025! That might mean switching jobs or even professions or, if you stay in the job you’re in now, securing a raise or promotion. Find ways to develop new skills or strengthen existing skills, and start networking with a focus on professional relationships. Think about joining industry groups, your local Chamber of Commerce or other organizations to widen your circle of influence.
If you haven’t joined the passive-income trend yet, consider starting a side hustle in 2025. There are countless articles, blog posts, podcasts, videos and other resources that can help you figure out which side hustle might be right for you. Look for a side business that aligns with your personal talents and goals. In many cases, people end up devoting their full attention to their side hustles and leaving their “day jobs.”
5. Save more money
Maybe you are expecting a bonus or raise in 2025. If that’s the case, vow to put most of it in savings.
Other ways to save more money include increasing your 401(k) contributions, setting up automatic transfers to a high-yield savings account and discontinuing any recurring subscriptions you no longer use or could live without.
6. Get sufficient insurance coverage in place
To what extent do you have sufficient insurance in place to protect your assets and future income?
Insurance is risk protection. It transfers the risk of losing an asset or future income to an insurance company. While the law requires that we insure vehicles and homes that we are making payments on, there is no legal requirement for anyone to secure life insurance, long-term care insurance, umbrella insurance or other types of protection. Yet getting sufficient protection in place can increase your confidence about your and your family’s financial future and avert a financia crisis in the event of an unexpected death, injury or illness.
Meet with your advisor and/or insurance agent to make sure you have all the types of insurance in place that are appropriate for your situation. And if it has been a while since you and your advisor and/or agent reviewed your coverage, make an appointment to do so in 2025. As your income increases and you accumulate more assets, you will likely need to adjust your coverage.
7. Increase your credit score
Having a high credit score can help you save on car and home loans and even on insurance. Some employers even look at credit scores when considering which candidates to hire. If your credit score is below 670, make it a resolution in 2025 to boost your score.
One way to improve your credit score is by paying your bills on time and in full. It can help if you set up auto-pay for some or all of your bills. Other ways to improve your credit are to pay off debt, limit how many new accounts you open and cut back on spending. Another strategy is to sign up for Experian Boost, a free service that lets you get credit for making on-time payments for utilities, your cell phone, streaming and other eligible bills that are not typically included on credit reports.
Checking your credit score does not reduce it, so check it often. You can use resources that allow you to check your score for free, such as Chase Credit Journey (no Chase account is required) and CreditWise® from Capital One (no Capital One account is required). By checking your score often, you will begin to see what types of actions impact your credit score, and by how much.
8. Start investing
If you’re already an investor, consider meeting with your advisor to explore the benefits of investing more money. If you are not an investor, why not start investing in 2025? It can help you outpace inflation and increase your purchasing power. In 2024, 62 percent of adults in the United States invested in the stock market.
Investing your money is a great way to build wealth. It enables your money to grow in value over time, with the benefit of compounding and long-term growth. Your advisor can help you decide which investments to choose. There are may options, including stocks, bonds, mutual funds, exchange-traded funds and real estate. The way you build your investment portfolio will depend on your income, age, risk tolerance and time horizon (the amount of time you will continue working before you retire).
A great first step is to learn more about investing. You could take a class at a local university or organization, read up on investing, follow financial experts online or join a local or online investment club.
9. Use an HSA or FSA to save for future health care expenses
A health savings account, or HSA, can help you increase the money you have available to pay for medical bills. It’s like a hybrid savings account. The money you contribute is earmarked for medical expenses, and there is no expiration date. As soon you reach a certain balance, you can invest some of the funds for more growth potential. You can set up an HSA if you are enrolled in a high-deductible health plan. Some employers that have health insurance plans offer HSAs. Some of them will even contribute to your HSA.
Also, there is a triple tax benefit with HSAs: 1) You won’t pay taxes on money you contribute; 2) Any part of the balance that’s invested has tax-free growth potential; and 3) money you take out is tax-free when you use it for qualified medical expenses.
If you don’t have an HSA-eligible health plan but do have access to a flexible spending account (FSA) with your employer, it can be worth considering. Like an HSA, an FSA allows you to set aside money before it is taxed to pay for health care costs. Any withdrawals you make are also tax-free, if you use them to cover qualified medical expenses.
It’s important to note that any money you save in an FSA typically has to be used in the same year as the contribution. So when the new benefit year begins, you might have to forfeit any funds that remain in the account from the previous year. Check to see if your employer offers a grace period.
10. Have a family money meeting
You can get everyone in your family involved in planning for the short- and long-term future by conducting family money meetings.
Family money conversations typically run the gamut from long-term financial planning to charitable giving to creating a family legacy. When children are old enough, these conversations also can cover how your and your spouse’s assets will be divided upon your death.
These might seem like uncomfortable conversations at first, but adding transparency and openness to your money situation will make life transitions easier for your children later on. This transparency also can help you preserve your family’s wealth.
Often, family meetings are informal meetings with immediate family members that last one or two hours. In some cases, family meetings last two or three days and involve several generations, with a financial advisor or someone else facilitating the meetings. We can facilitate these meetings for you.
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Here’s wishing you a happy, healthy and prosperous New Year, with great resolutions written down.
